Private equity and the “buy-and-build” boom

Private equity funds are increasingly turning to a “buy-and-build” (B&B) approach to boost revenues, realize value and increase returns. The B&B approach, also referred to as an “add-on” strategy, involves the purchase of a platform company, followed by the purchase of multiple related and complimentary targets through share or asset acquisitions. B&B strategies offer an alternative to otherwise potentially slow and cumbersome organic growth by setting the table for private equity funds to capture synergies through vertical integration, combined operational strength and leveraging a whole that is worth significantly more than the sum of its parts. B&B: the rise Bain & Company recently released its annual Global Private Equity Report for 2019 (the Report). The Report discusses, among other things, the benefits and challenges of a B&B strategy. The Report defines a B&B strategy as “an explicit strategy for building value…

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